The Study On Financial Support In Low Carbon Development

Finance plays an irreplaceable role in allocating financial resources andproviding financial support service, it is an effective solution to uncertain economicissues. The development of clean industry and the research of low-carbon technologycould not function well without financial department, especially the financial capital’sinput. The construction of a well-functioned financial system which aims atdecreasing carbon emission, will lead social resources flow to the new low-carbonindustry which means a higher productivity.Using the production function which is under the constraint of environmentalcondition and the VAR model, this article calculates the efficiency of low carboneconomy which considering the participating of financial capital, and also analysesthe effect of financial policy onto economic performance. Based on the theoreticalanalysis and empirical analysis, this article will construct a low-carbon economicsupporting financial system that comes up with three aspects, which refers to financialcapital, financial efficiency and financial policy.The empirical results show that, with financial capital considered, the efficiencydecreases by recent years; and financial policy do have some positive effect of risingthe carbon productivity and decreasing the per capital carbon emissions, but doesn’tlast long. It is reflected that the present financial system have some weaknesses onpromoting low carbon development. So this article’s discussions on how to build abetter financial system matters a lot.Compared with other papers, this article may have three creativities. First isfocusing on the relationship of finance and economic development, clarifying the roleof financial support on low carbon development from the aspects of financial capitaland financial policy. Second is building a production function with “three input-twooutput”, and using the parameter method to solve the function which makes theoutcome more credible. Third is based on the theoretical analysis, using the empiricalmodel to prove the theory which is put forward earlier.Because lack of data, this article does not dig deep on the relationship of financialinnovation and low carbon development, it remains to be discussed in the future.